SLI Systems

[Banksie]

That is the Xero model and why it is very scaleable. From a brief look at the company this doesnt look as attractive as Xero. Due to the revenue model, I would be more comfortable with them making increasing profits like Diligent does.

I totally agree - it is a DIL type product without the profits. That being said I wasn't around at the time - were DIL making profits before they listed?

[Schrodinger]

Good question. Diligent had an awful float and went down to 7c at one stage?

SLI is obvisouly at a different stage of the growth curve which to me makes it less attractive and focuses me in on the future growth prospects and profit potential.

If this is a growth company I would want to see this reflected in the revenue growth and slower cost growth (20% yoy which is good but not great). This company has bult a $20M revenue business without making even a minimum 10% margin or $2M profit.

This is actually making me want to invest in Diligent rather than SLI.

[Banksie]

Story in NBR - no new facts but it does summarise all the available information rather nicely.

http://www.nbr.co.nz/opinion/search-tomorrow

[lastmoa]

Story in NBR - no new facts but it does summarise all the available information rather nicely.

http://www.nbr.co.nz/opinion/search-tomorrow

Enjoyed the read thanks Banksie. Don't think I'm in on this one although do see potential long term. Market Cap seem a bit rich at the stage it is at, profits seem a ways off so weigh that up on risk, and I have other SAAS players that are more attractive, imho.

[CJ]

Tim Hunters view:

Personally, I'd say SLI's shares don't look a bargain at $1.50 and it may be possible to buy them for less after the company lists. Having said that, SLI looks a quality company run by quality people and its arrival on the public market is welcome. I hope it goes on to greater things.

http://www.stuff.co.nz/business/mone...s-to-boost-NZX

Interesting tid bit:

There's also a tax irritation, because SLI is technically a US-domiciled company. This means it falls under the fair dividend rate tax regime, so investors are deemed to have made a 5 per cent return on the stock and taxed accordingly, even though it produces no actual income.

[blobbles]

SLI for me is a tricky one.

Their product appears to be simply a learning search engine based on customer searching and what's trending probably on the site and elsewhere. While it's a fabulous idea right now, the signal that google is strongly moving into the space is discouraging. Google are the king's of search for a good reason, they have arguably the best people in the world working for them, which in IT makes all the difference. In the same breath though Google has a tendency to buy out excellent companies which already have a user base and whose technology they can't quickly replicate, which could make SLI a potential takeover target.

So Google could be working or about to release a product that beats the pants off SLI through cross selling and search integration which could spell the end of SLI. But they might buy out SLI as well... For me it's a bit of a gamble right now to invest in their IPO but I might in the future depending on Google's priorities...

[CJ]

Blobbles - I think I read that Google had moved out of this space rather than into it. This is consistent with Google culling its small products and aiming for moon shots (OS, driving cars, glasses, etc). If so, this is good for SLI and if/when they decide to reenter the space, are likely to buy up someone, whether it be SLI or one of SLI competitors.

[blobbles]

[QUOTE=Banksie;405710]It was competing against Google - but not the product we usually see but rather Google Commerce Search which is a paid service available to online retails. The good news for SLI is Google are discontinuing the product.

http://finance.yahoo.com/news/sli-sy...130000986.html

Remember how Google operate, they discontinue products only to replace them later with far superior products based on approaching the problem from a different angle. Think of Google Wave and it's replacement Google Plus. If you think Google are giving up on the lucrative product search space, I believe that would be a foolish assumption. Their original product search was Google goods (I think?) which never got out of beta, this was discontinued and replaced with the better Google products which was extended into companies own domains with Commerce. Most likely they are rethinking their strategy and will release something fabulous in the future, maybe integrating with google wallet.

[blobbles]

It was competing against Google - but not the product we usually see but rather Google Commerce Search which is a paid service available to online retails. The good news for SLI is Google are discontinuing the product.

http://finance.yahoo.com/news/sli-sy...130000986.html

Shaun Ryan's critique of Google Commerce Search gives some insight into how these products differ from the run of the mill Google search.

http://www.sli-systems.com/blog/2009...-critique.html

Blobbles - I think I read that Google had moved out of this space rather than into it. This is consistent with Google culling its small products and aiming for moon shots (OS, driving cars, glasses, etc). If so, this is good for SLI and if/when they decide to reenter the space, are likely to buy up someone, whether it be SLI or one of SLI competitors.

Absolutely, but I would argue accurate trending searches for products is both lucrative and a huge industry that fits well into other Google offerings. As such them "giving up" I would suggest is rather premature as search is their base business. Whether they will buy SLI or not is a different analysis...

[CJ]

[QUOTE=blobbles;406669]

Think of Google Wave and it's replacement Google Plus.

Not the best example.

More on the Google close down: http://techcrunch.com/2013/02/14/goo...r-e-retailers/

More a question for Googles strategy but why would you close down a product without a replacement if you plan to offer it in the future. Burning bridges aren't they?